Weekly € rates and comments – week commencing 1st September 2008

Sterling continued to fall throughout the week and lost ground on most major currencies as the intensifying talk of recession, poor market data and bleak forecasts for the UK economy took their toll on the pound in the markets. The Nationwide house price figures released on Thursday and further confirmation from Land registry certainly added to these woes. The steepest decline in prices since 1991 (and the last recession on these shores) will do nothing to boost confidence in a UK economy in dire need of reviving.

 

The euro is just about treading water at the moment currently at 1.2326/£1. Harmed by speculation of a potential recession over the past weeks, the euro has lost where the dollar has gained. However, thanks to comments from certain ECB members playing down 'premature' rumours of future cuts in interest rates, the euro rallied back against the pound and stemmed the flow against the US$ finishing the week only marginally lower.